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Posted 20 October 2014
Compulsory acquisition of land by Commonwealth and State authorities has long been controversial, but anxiety has risen in recent years. A number of major infrastructure development projects have been commenced or proposed in recent years, e.g. the NorthConnex and WestConnex projects in Sydney. We understand that more than 1,000 properties have been compulsorily acquired over the past five years and several hundred more are likely to be acquired as a result of these projects.
Acquisitions relevant to a strata scheme usually involve Transport for New South Wales or a Council. Acquisitions can involve an entire property, part of a property or limited rights, such as an easement. Such acquisitions are regulated by the legislation permitting compulsory acquisition, generally the Roads Act 1993 and/or Local Government Act 1993 as well as the Land Acquisition (Just Terms Compensation) Act 1991 (“Compensation Act”), which regulates the acquisition process itself, including notice requirements, time limits and the payment of compensation. Essentially, a proposed acquisition notice is issued and after 90 days elapses, given effect by gazettal. Compensation will be determined by the Valuer-General and provision is made for objections and appeals to the Land and Environment Court.
Authorities normally conduct negotiations prior to or in parallel with the statutory process and there is provision in the Compensation Act for an acquisition to proceed with the owner’s consent, where the authority and the owner have agreed on all relevant matters, including compensation. Property owners should be cautious about such agreements, as the authority will no longer be required to comply with a number of pre-acquisition obligations under the Compensation Act.
The Compensation Act provides for compensation to be based on market value, with additional components to cover other categories of loss, e.g. special value, disturbance and some legal, relocation and other costs. Many disputes about compensation involve claims in relation to relocation costs or claims that a property has a higher potential value than the one applicable to its current use or both.
State authorities generally claim to act fairly and to pay fair compensation and by and large they do. However, property owners do have difficulties, including:
Property owners who are concerned about proposed or possible acquisition of their properties should consider the following:
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.